Has anyone actually tried calling their brokerage about this? I talked to Fidelity last month about this exact issue because I wanted to use dividents without touching principal, and they told me something different.

I work as a tax preparer and see this confusion about Roth IRA dividends constantly during tax season. The bottom line is that dividends earned within a Roth IRA cannot be separated from other earnings for withdrawal purposes - they all get lumped together as "earnings" by the IRS. Here's what happens: When dividends are paid inside your Roth IRA, they increase your total earnings balance. If you withdraw ANY amount beyond your contributions, the IRS treats it as coming from earnings first (after contributions are exhausted), regardless of whether you think you're "just taking the dividends." The 5-year rule clock starts January 1st of the tax year for your first contribution. So if you first contributed in 2020, your 5-year period ends January 1, 2025. You need both the 5-year rule AND to be 59½ to take earnings (including dividends) tax and penalty-free. One thing I tell clients: if you need current income from investments, consider keeping dividend-paying stocks in a taxable account instead, where you can access the dividends immediately and only pay the qualified dividend tax rate (usually 0-20% depending on your income).

Just FYI, if you're donating property worth over $500, you need to fill out Form 8283. And for donations over $5,000, you need a qualified appraisal AND the appraiser has to sign the form. For donations over $20,000, you may need to submit the appraisal with your return. Also, be prepared for the IRS to question this. A $250k donation on a $60k income will almost certainly get extra scrutiny. Make sure all your documentation is perfect.

One thing I haven't seen mentioned yet is the timing aspect of this donation. Since you're looking at a $250k donation on $60k income, you'll likely be carrying forward unused deductions for several years due to the AGI limitations. You might want to consider splitting this donation across multiple tax years rather than doing it all at once. This could help you better utilize the deductions and potentially reduce the scrutiny from having such a large donation relative to your income in a single year. Also, keep in mind that the charity needs to provide you with a contemporaneous written acknowledgment for donations over $250. For a donation this large, they'll need to include a statement of whether you received any goods or services in return. Make sure to get this documentation before you file your return. The IRS is definitely going to look closely at this, so having everything perfectly documented from the start will save you headaches later.

One practical thing to consider - are you planning to continue the business with Tony's heirs? If they inherited his 50% interest, you should review your operating agreement ASAP. Many partnership agreements have buy/sell provisions that trigger upon death. This could impact whether you even need to worry about the step-up basis if you're required to buy out their interest at the agreed value.

I'm sorry for your loss, Chris. This is a complex situation that requires careful planning beyond just the tax implications. One important point that hasn't been mentioned yet - you'll want to determine Tony's basis in his partnership interest at the time of death. His heirs will receive a stepped-up basis in their inherited partnership interest equal to the fair market value of that interest ($340,000 based on the 50% share of the $680,000 property value). However, this is separate from the partnership's election under Section 754. The stepped-up basis for the heirs applies to their partnership interest, while the Section 754 election creates a special basis adjustment for the partnership's assets. Also, consider the timing carefully. You have until the due date of the partnership return (including extensions) for the year of Tony's death to make the Section 754 election. But as others mentioned, check your operating agreement first - there may be mandatory buyout provisions that could change your entire approach. Given the complexity and the significant dollar amounts involved, I'd strongly recommend consulting with a tax professional who specializes in partnership taxation before making any elections or decisions.

Thanks for all the detailed responses everyone! This is super helpful as a first-time filer. I went ahead and checked out that "Where's My Refund" tool Ben mentioned and it's showing "Return Received" so far. I filed electronically with direct deposit about 10 days ago, so sounds like I'm still within the normal timeframe. One question though - I did claim some education credits for my college expenses. Based on what Caesar mentioned about certain credits causing delays, should I expect this to take longer than the standard 21 days? I'm not in a huge rush but it would be nice to know what to realistically expect. Also really appreciate the tip about Wednesday morning deposits Kara - I'll definitely keep that in mind once it gets approved!

Hey Marcus! Welcome to tax season! Based on my experience over the past few years, education credits like the American Opportunity Tax Credit or Lifetime Learning Credit typically don't cause major delays like EITC does. You should still be looking at roughly 2-3 weeks total processing time. Since you're already at 10 days and showing "Return Received," you're right on track. The education credits might add a few extra days for verification, but nothing like the automatic hold that happens with EITC. I'd expect to see your status change to "Refund Approved" within the next week or so. One thing I learned - the IRS tends to batch process returns with similar credits together, so education credit returns often get processed around the same timeframe. Keep checking that tracker every few days (but not obsessively - I made that mistake my first year!). You picked a good time to file too - January/February filers definitely get faster service than the April rush crowd. Sounds like you've got this adulting thing figured out pretty well!

Has anyone actually successfully claimed the Lifetime Learning Credit for Coursera courses before? I tried last year with TurboTax and it kept asking for a 1098-T which I didn't have. Ended up not claiming anything because I was worried about triggering an audit.

I actually went through this exact situation last year with my Coursera IT certificate! Here's what I learned: You absolutely can claim these expenses without a 1098-T. The key is documenting everything properly. I kept screenshots of my course enrollment showing the required computer specs, all my monthly payment receipts from Coursera, and the computer purchase receipt with a note explaining why it was needed for the course. For the Lifetime Learning Credit, what matters is that the course helps you acquire or improve job skills - which IT Help Desk training definitely does. The computer counts as a qualified expense if it's required for the course (not just convenient). I ended up claiming about $1,800 total between the course fees and my laptop. No audit issues, got the credit approved. Just make sure you can show the computer was actually required, not just a personal upgrade you wanted to make anyway. The IRS doesn't require a 1098-T for the Lifetime Learning Credit - they just want proof you paid qualified educational expenses. Keep those receipts organized and you should be fine!